Financially troubled Filene’s Basement cut to four stores in state

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Struggling discounter Filene’s Basement is closing four Massachusetts stores — about 15 percent of the chain’s locations — by the end of the year.

Store employees at the Braintree, Peabody, Saugus, and Watertown sites yesterday confirmed the shops would be shuttered around Christmas and that ongoing sales are final. Filene’s Basement has recently run newspaper advertisements featuring storewide 20 to 40 percent discounts only at these four locations.

Officials from Filene’s Basement and its parent company, Syms Corp., did not return messages last night seeking comment. A store associate who answered the phone in Braintree said the retailer did not renew its lease and would shutter by the end of December. An employee at the Filene’s Basement in Saugus said the store was closing because of a lack of business and workers were taking inventory last night.

Only three Filene’s Basement locations in Massachusetts will be left, in the Back Bay, Newton, and Norwood.

Retail analysts say the company, which says it invented the bargain, has suffered since shuttering the flagship store in Downtown Crossing several years ago. And Syms, the New Jersey discounter that bought Filene’s Basement out of bankruptcy in June 2009, has failed to turn around the brand with new strategies, such as creating joint stores to feature merchandise from both retailers.

“Losing the flagship cut the heart out of the organization. But there have been problems too since the Syms takeover, and at the end of the day, their stuff is just not as interesting to buy,’’ said Mike Tesler, president of Retail Concepts, a consultancy in Norwell. “These closings raise serious questions about the future. In the offprice world, it’s all about buying power and credibility. It’s going to be harder and harder to provide good deals. If it’s not working for shoppers here, it’s very doubtful it’s working for shoppers in Maryland and Connecticut.’’

Before Filene’s Basement filed for bankruptcy in 2009, it shut down 11 of the chain’s locations. After the latest round of closings is finished in December, only 22 will remain, according to a list of stores on the company’s website.

‘Losing the flagship cut the heart out of the organization. . . . and at the end of the day, their stuff is just not as interesting to buy.’

Mike Tesler Retail Concepts

Edward A. Filene founded Filene’s Basement more than a century ago as a way to sell excess merchandise from his father’s department store upstairs.

The basement pioneered the concept of bargains when it devised a system of automatic markdowns, where merchandise is discounted on a set schedule that customers can track.

When Syms purchased Filene’s Basement at an auction, it promised to restore the historic clothing chain’s luster. And Syms chief executive Marcy Syms has said in past interviews that she is committed to bringing Filene’s Basement back to Downtown Crossing. But now, Syms is facing a lawsuit filed by a shareholder, Esopus Creek Value Series Fund, that accuses management of “running the company [into] the ground and ignoring shareholders’ rights.’’

In the suit, which was filed this summer in New Jersey Superior Court, Esopus said Syms is “failing to make progress integrating Filene’s Basement effectively, and continues to hemorrhage cash, yet recently signed several additional store leases, including the most expensive lease in the company’s history.’’